Data trading is outmoded and no longer fit for purpose

We live in a complicated world.

In the old days, clients wanted to do mailings. They spoke to their agencies to create a shiny responsive mail piece. The agency then spoke to their list broker. They then spoke to various list managers, and list managers spoke to list owners. The data was then ordered and supplied to bureau on magnetic tapes, who under took a merge/purge. The price of the data was agreed upfront, with the list owner setting the minimum amount they were prepared to sell the data for.

Data had a value that was very evident.

In the days of Cheshire labels and magnetic tapes access to data was limited. The list owner held all the cards and the barriers to market were many. Rules of engagement were clear: data was a precious commodity with a significant value. Misuse it at your peril, because there is a clear trail to the use of the data, as well as its original source.

Fast forward 20 years… and what does the industry now look like?

The nice linear buying process is fractured.

Mailers are buying directly from data owners (who are no longer list owners). Data owners may have the same data with a number of list managers. There has been an increase in the number of compiled data sets – so less transparency around the provenance of the original data. Data no longer relates just to a name and address, but also landline, mobile number, email address etc. Data is downloaded from FTP sites and bureaux add value to the merge/purge process (resulting in ‘cleaner’ data). Data costs are heavily negotiated before ordering and there is an increasing trend towards credits being requested once the campaign has gone.

The protocols around how data is traded however has not taken any of this into account.

The industry previously could self-regulate itself. Data was held on mainframes and was supplied on labels (either Cheshire / self-adhesives) or on magnetic tapes. Data was couriered from list supplier to bureau with signatures for each part of the process. When delivered, it was held in walk-in a safe.

Today, data is held on a variety of different platforms and sent in a variety of secure and unsecure methods. As a result, data is no longer a commodity that is difficult to come by. Millions of records can be easily downloaded from unsecure websites for a few hundred pounds, thereby creating a shift in the buying paradigm.

List owners previously held the power, as they controlled a scarce commodity. Now it is the mailer, as information is so freely available. A mailer’s expectation as to what they feel they should be paying for and what the data owner believes they should be paying for, is often worlds apart.

For example if ‘J Brown, 1 Love Lane, London’ is a record showing as deceased on an industry suppression file and you find a Mr J Brown at the same address on a mailing file, is this the same person? What if you find a Julie Brown at the same address? Or even, what do you do if you have an Anne Smith in a household where a J Brown lives, do you mail the person or suppress?

Every mailer will have their own view as to what to do and will be looking for credits from the data owner if the percentage of these kinds of suppressions is high. In which case ought the data owner credit?

The bottom line is that the mailer is paying for names that are not used and paying to have ‘incorrect/inaccurate’ names suppressed.

So, is it time to get away from cost per thousand rates for names supplied? And if so, what could it be? A cost per thousand rate for names mailed – a clear winner with the mailer, but I would suspect this would be unpopular with the data owners. Or would it be a fixed fee? So that no matter how many names were ordered or used, the mailer would pay a one-off fee, for the agreed data usage.

Or do we just say “It is what it is!”?

By DMA Guest Blogger Suzanne Lewis, Managing Director, EDMMEDIA and member of the DMA Data Council